Issue Background Findings Conclusions Recommendations Responses Attachments Treatment of Property Owners in Redwood City Redevelopment Project Issue Did the Redwood City Redevelopment Agency give fair and equitable treatment to the property owners who were evicted by the Retail/Cinema Complex development project? Summary The use of eminent domain in redevelopment projects has long been an emotionally and politically charged issue since private property is the very foundation of our free society. The United States Constitution declares in no uncertain terms that nor shall private property be taken for public use, without just compensation. In 2003, the Redwood City Redevelopment Agency (RDA) condemned a set of parcels to allow a private developer to build a privately owned retail/cinema development project, known as the Retail/Cinema Complex, on the site. The focus of the Grand Jury investigation was not in the complex details of the condemnation, but rather in the reported insensitive treatment by the RDA of several of the property owners who were displaced. The Grand Jury wanted to ascertain whether these property owners had suffered disproportionate injuries in the course of the eminent domain negotiations. After receiving several complaints, the Grand Jury conducted interviews with personnel from the Redwood City Community Development Services Department and with some of the property owners displaced by the project. In addition, the Grand Jury noted several articles and letters to the editor appearing in local newspapers that were critical of the manner in which the RDA exercised the power of eminent domain. Although several years have passed since the eminent domain negotiations, the property owners still felt bruised enough by the experience to express their resentment somewhat emotionally. They believed that they had not been treated with respect and that they had been mistreated both by the time delays of the proceedings as well as by the intense pressure placed on them to settle. 1
The Grand Jury concludes that the RDA did not give fair and equitable treatment to the property owners who were evicted by the Retail/Cinema Complex. The Grand Jury recommends that the Redwood City Council direct the RDA to develop written guidelines for its staff on proper treatment of citizens, and to conduct a staff training session. In addition, the Council should set up a mechanism for dealing with citizen and property owner complaints concerning the RDA, either by the use of an ombudsman or a selected city council member who would act as the point person for complaints concerning the RDA. 2
Treatment of Property Owners in Redwood City Redevelopment Project Issue Did the Redwood City Redevelopment Agency give fair and equitable treatment to the property owners who were evicted by the Retail/Cinema Complex development project? Background The use of eminent domain in redevelopment projects has long been an emotionally and politically charged issue. Private property is the very foundation of our free society. Our United States Constitution declares in no uncertain terms that nor shall private property be taken for public use, without just compensation. Governmental entities, such as redevelopment agencies, should always exercise caution in eminent domain proceedings and should err on the side of fairness with their citizens in such proceedings. At the same time, well-planned redevelopment projects on properties acquired in a fair and legal manner can serve well the needs of the public. The treatment of property owners in eminent domain cases is covered in California Government Code Section 7260.5(b): This chapter establishes a uniform policy for fair and equitable treatment of persons displaced as a direct result of programs or projects undertaken by a public entity. The primary purpose of this chapter is to ensure that these persons shall not suffer disproportionate injuries as a result of programs and projects designed for the benefit of the public as a whole and to minimize the hardship of displacement of these persons. In 2003, the Redwood City Redevelopment Agency (RDA) condemned a set of parcels to allow a private developer to build a privately owned development project known as the Retail/Cinema Complex on the site. The focus of the Grand Jury investigation was not in the complex details of the condemnation, which resulted in a winning lawsuit by one of the property owners, but rather in the reported insensitive treatment by the RDA of the property owners who were displaced. The Grand Jury wanted to ascertain whether these property owners had suffered disproportionate injuries in the course of the eminent domain negotiations. 3
Investigation After receiving several written complaints, the Grand Jury conducted interviews with personnel from the Redwood City Community Development Services Department and with some of the property owners displaced by the project. In addition, the Grand Jury noted several articles and letters to the editor appearing in local newspapers that were critical of the manner in which the RDA exercised the power of eminent domain. Findings Organization of the City Council and RDA The City Council of Redwood City sits as the RDA Board, a dual role that is a common practice for California cities. The RDA staff deals with planning, finding suitable developers for a redevelopment project, preparing the redevelopment justification, negotiating with property owners, and relocation. The City Council is the highest level of appeal for grievances held by city residents. Because the City Council of Redwood City serves as the RDA board of directors, there is no independent body to which a property owner or resident can complain about actions of the RDA in offering fair market value for property. This dual role of the City Council as the RDA projects an apparent conflict of interest. Treatment of Affected Property Owners in the Retail/Cinema Project Although two years have passed since the eminent domain proceedings and purchase negotiations, the Grand Jury found that the citizens still felt bruised enough by the experience to express their resentment somewhat emotionally. They felt that they had not been treated with respect and that they had been mistreated both by the time delays of the proceedings as well as by the intense pressure that was placed on them to settle. In one case, the property owners were elderly and were very upset by the behavior of the RDA negotiators who showed up at their doorstep without notifying their attorney as had been requested. Because the Redevelopment Agency is, in reality, the Redwood City Council wearing different hats, there was nobody in the city government to whom they could appeal to relieve the intensity of the RDA pressure. Another property owner was forced to spend $75,000 on appraisers and legal fees before the city, after a protracted period of time, finally raised their offer by 31% to $1,130,000. The representatives of the RDA walked out of court-required mediation and did not settle until the final court hearing. This property owner felt that the RDA had needlessly prolonged the negotiations so that the property owner would have to incur extra legal and appraisal expenses, and therefore be more willing to settle for the RDA's terms. The fact that the City did finally agree to settle for a higher market price should not have prompted the City Manager to verbally insult the property owner. 4
Conclusions The Redwood City Redevelopment Agency did not provide fair and equitable treatment to the property owners who were evicted by the Retail/Cinema Complex development project. The RDA forced property owners to settle at the lowest possible price by employing delaying tactics and verbal coercion. The Grand Jury is of the opinion that in using these techniques, the Redwood City RDA imposed an emotional and financial hardship on the affected property owners. Because the City Council of Redwood City serves also as the RDA Board of Directors, there is no independent body to which a property owner can file grievances about actions of the RDA in offering fair market value for property. This dual role of the City Council as the RDA Board projects an apparent conflict of interest. Recommendations The Redwood City Council should: 1. Direct the Redevelopment Agency to develop written guidelines for its staff on proper treatment of citizens, and conduct training sessions to acquaint the staff with the contents of these guidelines (staff should be made aware of California Government Code Section 7260.5(b) concerning treatment of the public). 2. Set up a mechanism for dealing with citizen complaints concerning the Redevelopment Agency, such as: a) Appoint a RDA Ombudsman familiar with the statutory duties and rights of the property owners who will actively seek out persons affected by RDA actions to insure that they are being fairly treated. The RDA Ombudsman would report periodically to the City Council; or alternatively, b) Designate a member of the City Council as the point person for complaints concerning the RDA. This member, familiar with the statutory duties and rights of the property owners, would seek appropriate remedies and report back to the City Council concerning required actions. 5